Investors will get a fraction of the shares they applied for in Emaar Malls Group, the retail business that owns The Dubai Mall, following a surge of interest from foreign institutions in the Dh5.8 billion initial public offering that begins trading on Thursday.
The shares will start at the top of the price range set by the company and its advisers. At Dh2.9 per share, EMG will have a market capitalisation of Dh37.7bn on the Dubai Financial Market.
Foreign institutional interest in the IPO has been strong, according to a notice posted on the DFM.
Institutional investors – who were allotted 70 per cent of the issue – have bid for 30 times the number of shares available at the top price of Dh2.9.
In total, there were 470 orders on the institutional orders book, the notice said.
The offer to retail investors in the UAE was 20 times oversubscribed.
Analysts said the big international interest in the IPO, and unmet demand from local investors in the UAE, is set to guarantee a busy first day’s trading in the shares. “The huge demand speaks of the valuation placed on the company by global and local investors, who are willing to invest at the high end of the range. There is still lots of demand out there, given the level of oversubscription,” said Ramzi Sidani, vide president at Shuaa Asset Management.
Mohammad Kamal, equity research director of Arqaam Capital, said: “They have priced them at the top because demand meant they were able to achieve it. It’s a relatively aggressive but fair valuation of EMG.”
Allotment details and refunds of cash for unsuccessful applicants will be processed over the next two days.
Within the tranche of shares allocated to qualified institutions, the company and its advisers are free to determine allocation levels for foreign and Emirati investors.
“There was a desire for the company to attract liquidity from outside the UAE,” said Mohammed Ali Yasin, the managing director of NBAD Securities, the brokerage business.
Mohamed Alabbar, the chairman of Emaar Malls, said: “We are delighted that the landmark IPO has been so successfully received by both institutional and individual investors.
“The business has performed very well in the last five years and we firmly believe that our prominence within the Middle East and North African fertile retail sector, alongside our world-famous assets and experienced management team, is a potent combination which will support the future growth.
“We welcome all new shareholders as we enter a new phase in the development of the company,” he added.
The first constitutive general assembly of EMG takes place today in Dubai, to formalise the incorporation of the company.
Mr Alabbar also said that an IPO of the company’s hotels business could be announced “within a few months”.
Some 15 per cent of the malls unit is being floated on the DFM by Emaar Properties, the property developer and hospitality group owned 29 per cent by the government of Dubai.
Most of the proceeds of the IPO, totalling some Dh5.8bn, will be paid to investors of the parent group in dividends.
fkane@thenational.ae
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